Trans Mountain expansion hits 'technical issues,' possibly delaying completion

The Trans Mountain pipeline expansion is facing delay yet again.

The Crown corporation building the massive project, which had previously stated it expected to have the pipeline in-service near the end of the first quarter, said Monday it has once again run into construction challenges in B.C. and pushed that date back.

The Trans Mountain pipeline is Canada's only oil pipeline to the West Coast and its expansion will increase the pipeline's capacity to 890,000 barrels per day from 300,000 bpd currently.

In a statement on its website, Trans Mountain Corp. said Monday it has encountered "technical issues" and needs additional time to determine the "safest and most prudent actions for minimizing further delay."

The company said the technical issues were discovered between Jan. 25 and Jan. 27 during construction work in the Fraser Valley between Hope and Chilliwack, B.C.

"Trans Mountain is fully focused on the completion of the pipeline and will not be providing (media) interviews at this time as it works towards the anticipated in-service date in the second quarter of 2024," the company stated.

Its construction, which is more than 98 per cent complete, has been underway for more than three years.

Canadian oil producers have already begun ramping up production in expectation of the additional export capacity, which is expected to improve the prices Canadian oil companies receive.

But Trans Mountain Corp. has been racing against the clock as it deals with difficulties drilling through hard rock in B.C.

Its initial request to use a different size of pipe for the location in question was denied by the Canada Energy Regulator due to concerns around pipeline quality and integrity.

Trans Mountain Corp. then asked the regulator to reconsider, saying in December that the project could face a worst-case scenario of a two-year delay in completion if it was not allowed to alter its construction plans.

After an oral hearing in Calgary earlier this month, the regulator then agreed to allow a pipeline variance, as long as Trans Mountain Corp. abided by a number of conditions, including testing and documentation requirements for the pipe materials.

"We had a timeline in sight, and we were so close, only to now be disappointed. And I think that's been the narrative of this project from the beginning," said Raymond James analyst Jeremy McCrea in an interview on Monday.

"If we can come out with a Q2 startup, great, but I think now there's going to be a lot of skepticism. Is that date going to be pushed out again?"